Syscan Imaging, Inc. Announces Second Quarter Financial Results SAN JOSE, Calif., Aug. 17 /PRNewswire-FirstCall/ -- Syscan Imaging, Inc. (OTC:SYII) (BULLETIN BOARD: SYII) , a leading OEM and private label manufacturer of mobile image scanning systems, today announced financial results for its 2004, second quarter, which ended June 30, 2004. The company's revenues increased to $974,831 for the three months ended June 30, 2004 from $946,874 for the same period in fiscal 2003, an increase of approximately 3.0%. Revenues decreased to $2,480,948 for the six months ended June 30, 2004 from $2,724,957 for the same period in fiscal 2003, a decrease of approximately 9.0%. The increase for the three months ended June 30, 2004 is primarily attributable to strong new product sales. The decrease in revenues for the six months ended June 30, 2004 as compared to the same period in fiscal 2003 is the result of channel inventory levels that remained from Q4 2003. Gross profit increased to $357,742, or 36.7% of net revenues for the three months ended June 30, 2004 from $249,767, or 26.4% of net revenues for the same period in fiscal 2003. Gross profit increased to $825,650, or 33.3% of net revenues for the six months ended June 30, 2004 from $743,316, or 27.2% of net revenues for the same period in fiscal 2003. The increase in gross profit for the three and six months ended June 30, 2004 as compared to the same period in fiscal 2003 is the result of the company's revised sales and marketing strategy focusing on the Value Added Reseller (VAR) and small- office-home-office (SOHO) market places. We anticipate that it will be difficult to continue our rise in gross profit margins as our China based supplier's source and logistics costs including higher fuel prices are projected to rise through the year ended December 31, 2004, which would result in our experiencing a higher cost of goods sold. The Company experienced a net loss of ($123,974) for the three months ending June 30, 2004 and ($110,294) for the first six months ending June 30, 2004 compared to a profit of $123,847 and $387,790, respectively, during the comparable periods in 2003. The Company's net loss is primarily attributable to increased expenses related to the Company's newly formed imaging display group and secondarily to additional personnel costs and outside fees incurred in connection with the completion of the Company's reverse merger activities. Darwin Hu, SYII's Chairman and Chief Executive Officer, reported, "We are comfortable with the Company's results and believe that the completion of the reverse merger will allow us to focus on and continue to grow our current image capture line-up, while creating break through technology solutions for the image display market." Further Mr. Hu stated, "We have an opportunity to leverage our core IP into the much larger display market, the foundation has been laid, the contacts and distribution channels exist, now we must execute." Calendar Year 2004, Q2 highlights: * The completion of our reverse merger giving the Company greater visibility and the currency to consider potential strategic acquisitions. * Completed Product Verification Test's (PVT) related to the Company's next generation duplex mobile scanning devices. * Finalized unique HDTV controller board design, which will mark the Company's first technology solution aimed at the growing LCD/Plasma/HDTV image display market. * Initiated and completed a major OEM customer launch, expanding their business from providing CIS modules to providing full turn key scanner production. About Syscan Imaging, Inc. Headquartered in San Jose, California with additional offices in the Netherlands and Hong Kong, Syscan Imaging, Inc. designs and manufactures imaging technology solutions. Currently the Company ships proprietary image-scanning products to customers throughout the United States, Canada, Europe, South America, Australia and Asia. The Company has been granted 21 patents related to imaging technology with an additional 13 patents under review. Syscan Imaging, Inc.'s common stock is publicly traded on the OTC Bulletin Board under the symbol SYII. All trademarks and copyrights contained herein are the property of their respective holders. Note on Forward-Looking Statements Statements contained in this press release, which are not historical facts, are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based largely on current expectations and are subject to a number of known and unknown risks, uncertainties and other factors beyond our control that could cause actual events and results to differ materially from these statements. These statements are not guarantees of future performance, and readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Syscan undertakes no obligation to update publicly any forward-looking statements. DATASOURCE: Syscan Imaging, Inc. CONTACT: David P. Clark of Syscan Imaging, Inc., +1-561-835-4069,

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